When you have shortage of money in your pockets and you want to buy a house, you may take out mortgage loans to get the required amount of money. The first time home-buyers usually take out a fixed rate mortgage loan since the interest rate in this type of mortgage loan remains fixed for the entire term of the loan period. Many people may also take out an adjustable rate mortgage loan where the interest rate fluctuates with the rise and fall in the market. This may happen that when you take out an adjustable rate mortgage loan, the interest rate on your loan amount was low but later the interest rate may rise according to the market. Documents required for taking out mortgage loans While taking out mortgage loans, you need to provide certain documents to the lender in order to get approval for your loan.
You need to show your identification proof by providing your passport or driving license.
You have to show the proof of your residential address. The lenders need three years proof of the place where you live.
If you are employed and want to take out a mortgage loan, you need to provide at least three months wage slip. In case you cannot provide the wage slip, the lender can directly ask your employer for your reference.
If you are self employed, the lender will check the transactions of at least last 12 months in order to find out your earning capacity.
Types of mortgage payments
Biweekly payments – In this type of mortgage loans, the borrower has to make payments in every two weeks instead of making the monthly payments. This is said as a slightly short repayment period. When you make biweekly payments on your mortgage loan, it results in 26 payments in a year. As such, this is equivalent to thirteen monthly payments.
Bimonthly payments – In bimonthly mortgage loans, you do not have to make any extra payment and as such, you can save the interest rate by advancing your payment by half the month. In case of a bimonthly payment, you have to make 24 payments in a year.
It is advisable that while taking out mortgage loans, you shop around properly and then choose mortgage loans that you want to take out. You should also read the terms and conditions of the mortgage loans very carefully so that you do not have to face problem while repaying your loan amount in future.